The Federal government established Fannie Mae in 1938 in an effort to expand the flow of mortgage money by creating a secondary mortgage market. In 1968, Fannie Mae became a private company operating with private capital on a self-sustaining basis. In 1979, its Executive Committee established the Fannie Mae Foundation with a $600,000 seed endowment for the purpose of making charitable contributions aimed at improving the quality of life for the people of Fannie Mae's hometown, Washington, D.C. The Foundation's focus was on expanding home ownership, "especially for low-income and minority families." The Foundation reported that as of January 2005, it had provided more than 17 million people with "free, step-by-step home-buying information to help them achieve the American dream of home ownership."

The Fannie Mae Foundation offered home-buying guides that outlined the basics of purchasing and maintaining a home, borrowing money, and choosing the best mortgages. One such publication, titled the New Americans Guide, provided information on the home-buying process for immigrants in America. The Foundation also provided homeownership education programs to help what it called "underserved populations" gain access to affordable housing.

In a joint venture with the John F. Kennedy School of Government at Harvard University, the Fannie Mae Foundation Fellowship Program annually sponsored up to 35 fellowships for elected and appointed officials. These were three-week training programs taught by Kennedy School faculty and geared toward people interested in promoting affordable housing in the United States. Between 1995 and 2006, more than 285 local and state officials were chosen for such fellowships.

Each year the Fannie Mae Foundation hosted a Help the Homeless Walkathon, which in 2005 raised a record-breaking $7.8 million to benefit 178 Washington-area homeless service providers. Between 1988 and 2005, the annual Walkathons brought in more than $54.5 million.